The New Zealand government announced on Sep. 3 that it would nearly triple its visitor levy from NZ$35 (S$28) to NZ$100 (S$81). Scheduled to kick in on Oct. 1, the increase is part of a bid to reduce pressures of international tourism on local communities. Tourism Minister Matt Doocey added that the new levy “remains competitive”, and the government is confident of New Zealand’s continued appeal as a tourist destination. He added that the change is “unlikely to have a significant impact on visitor numbers”.
## Background
New Zealand taxpayers currently pay close to NZ$884 million (S$716 million) a year for tourism and conservation. Apart from taxes, international tourism also comes with costs to local communities, such as “additional pressure on regional infrastructure and higher upkeep and maintenance costs across [the country’s] conservation estate”, said Doocey. The levy was introduced in 2019 to ensure that international visitors contributed directly to these costs. A subsequent public consultation by the government found that 93 per cent of the 1,101 respondents supported raising the levy. The main rationale was that such an increase would “be reasonable” to help cover the costs of tourism, Doocey added. New Zealand and Australian citizens and permanent residents, diplomats, and people from many Pacific Island countries are exempt from the requirement.
## Contribute to costs
The increased levy aims to alleviate the financial burden on New Zealand taxpayers, who currently shoulder nearly NZ$884 million (S$716 million) annually for tourism and conservation. Tourism Minister Matt Doocey highlighted that international tourism imposes additional pressure on regional infrastructure and increases upkeep and maintenance costs across the country’s conservation estate. The levy, introduced in 2019, ensures that international visitors contribute directly to these expenses. A public consultation revealed that 93 per cent of the 1,101 respondents supported raising the levy, deeming it a reasonable measure to help cover tourism costs. Exemptions from the levy include New Zealand and Australian citizens and permanent residents, diplomats, and individuals from many Pacific Island countries.
## Criticism
Last month, the New Zealand government announced an increase in the costs of visitor visas, also effective from Oct. 1. A proposal is also underway to increase charges on regional airports, Reuters reported. New Zealand’s Tourism Industry Association expressed concerns that the higher fees would make it “incredibly expensive” to visit the country, even as it attempts to recover from strict border closures during the COVID-19 pandemic. “New Zealand’s tourism recovery is falling behind the rest of the world, and this will further dent our global competitiveness,” said chief executive Rebecca Ingram according to Al Jazeera. The hike, along with the recent 60 per cent increase in visa fees, would bring the cost of visiting New Zealand to as much as NZ$500 (S$405) per person, she added. The International Air Transport Association (IATA) expressed similar sentiments that the changes would make travel to New Zealand “more expensive and less attractive”. It would additionally further delay the recovery in New Zealand’s visitor numbers to beyond 2026, IATA said.
## Future implications
The increased visitor levy and other associated costs are part of New Zealand’s broader strategy to manage the impact of international tourism on local communities and infrastructure. While the government maintains that the new levy will not significantly deter tourists, industry stakeholders warn of potential long-term repercussions. The Tourism Industry Association and IATA have voiced concerns that these measures could hinder New Zealand’s tourism recovery, which is already lagging behind global trends. As the country navigates these changes, the balance between sustainable tourism and economic recovery remains a critical focus. Future developments will likely hinge on the effectiveness of these measures in addressing the financial and environmental pressures posed by international tourism.
